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Now, if that be the true position under the relevant provisions of section 13 it would be difficult to accept the argument that a prior stage when Government is acting under section 12(5) it is obligatory on it to make a reference as contended by the respondent. Ratio |
The controversy between the parties as to the construction of section 12(5), is, however, only of academic importance. Ratio |
On the respondents ' argument, even if it is obligatory on Government to make a reference provided it is satisfied that there is a case for reference, in deciding whether or not a case for reference is made Government would be entitled to consider all relevant facts, and if on a consideration of all the relevant facts ... |
According to the appellant and the company also though the discretion is with Government its refusal to make a reference can be justified only if it records and communicates its reasons therefore and it appears that the 243 said reasons are not wholly extraneous or irrelevant. Ratio |
In other words, though there may be a difference of emphasis in the two methods of approach adopted by the parties in interpreting section 12(5) ultimately both of them are agreed that if in refusing to make a reference Government is influenced by reasons which are wholly extraneous or irrelevant or which are not germa... |
It would thus appear that even the appellant and the Company do not dispute that if a consideration of all the relevant and germane factors leads the Government to the conclusion that there is a case for reference the Government must refer though they emphasise that the scope and extent of relevant consideration is ver... |
Therefore both the methods of approach ultimately lead to the same crucial enquiry : are the reasons recorded and communicated by the Government under section 12(5) germane and relevant or not ? It is common ground that a writ of mandamus would lie against the Government if the order passed by it under section 10(1) is... |
Similarly it is not disputed that if a party can show that the refusal to refer a dispute is not bona fide or is based on a consideration of wholly irrelevant facts and circumstances a writ of mandamus would lie. Ratio |
The order passed by the Government under section 12(5) may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny ; in that sense it would be correct to say that the court hearing a petit... |
After an elaborate argument on the construction of section 12(5) was addressed to us it became clear that on this part of the case there was no serious dispute between the parties. Ratio |
That is why we think the controversy as to the construction of section 12(5) is of no more than academic importance. Ratio |
That takes us to the real point of dispute between the parties, and that is whether the reason given by the appellant in the present case for refusing to make a reference is germane or not. Ratio |
The High Court has held that it is wholly extraneous and it has issued a writ of mandamus against the appellant. Ratio |
We have already seen that the only reason given by the appellant is that the workmen resorted to go slow during the year 1952 53. Ratio |
It would appear prima facie from the communication addressed by the appellant to the respondents that this was the only reason which weighed with the Government in declining to refer the dispute under section 12(5). Ratio |
It has been strenuously urged before us by the appellant and the company that it is competent for the Government to consider whether it would be expedient to refer a dispute of this kind for adjudication. ARG |
The argument is that the object of the Act is not only to make provision for investigation and settlement of industrial disputes but also to secure industrial peace so that it may lead to more production and help national economy. ARG |
Co operation between capital and labour as well as sympathetic understanding on the part of capital and discipline on the part of labour are essential for achieving the main object of the Act; and so it would not be right to assume that the Act requires that every dispute must necessarily be referred to industrial adju... |
It may be open to Government to take into account the facts that the respondents showed lack of discipline in adopting go slow tactics, and since their conduct during a substantial part of the relevant year offended against the standing orders that was a fact which 245 was relevant in Considering whether the present di... |
On the other hand, the High Court has held that the reason given by the Government is wholly extraneous and its refusal to refer the dispute is plainly punitive in character and as such is based on considerations which are not at all germane to section 12(5). Ratio |
This Court has always expressed its disapproval of breaches of law either by the employer or by the employees, and has emphasised that while the employees may be entitled to agitate for their legitimate claims it would be wholly wrong on their part to take recourse to any action which is prohibited by the standing orde... |
Even so the question still remains whether the bare and bald reason given in the order passed by the appellant can be sustained as being germane or relevant to the issue between the parties. Ratio |
Though considerations of expediency cannot be excluded when Government considers whether or not it should exercise its power to make a reference it would not be open to the Government to introduce and rely upon wholly irrelevant or extraneous considerations under the guise of expediency. Ratio |
It may for instance be open to the Government in considering the question of expediency to enquire whether the dispute raises a claim which is very stale, or which is opposed to the provisions of the Act, or is inconsistent with any agreement between the parties, and if the Govern ment comes to the conclusion that the ... |
But even in dealing with the question as to whether it would be expedient or not to make the reference Government must not act in a punitive spirit but must consider the question fairly and reasonably and take into account only relevant facts and circumstances. Ratio |
In exercising its power under section 10(1) it would not be legitimate for the Government for instance to say that it does not like the appearance, behaviour or manner of the secretary of the union, or even that it disapproves of the political 246 affiliation of the union, which has sponsored the dispute. Ratio |
Such considerations would be wholly extraneous and must be carefully excluded in exercising the wide discretion vested in the Government. Ratio |
In the present case it is significant that the company has voluntarily paid three months bonus for the relevant year not withstanding the fact that the workmen had adopted go slow tactics during the year, and the report of the conciliator would show prima facie that he thought that the respondents ' claim was not at al... |
The reasons communicated by the Government do not show that the Government was influenced by any other consideration in refusing to make the reference. Ratio |
It is further difficult to appreciate how the misconduct of the respondents on which the decision of the Government is based can have any relevance at all in the claim for the classification of the specified employees which was One of the items in dispute. Ratio |
If the work done by these employees prima facie justified the claim and if as the conciliator 's report shows the claim was in Consonance with the practice prevailing in other comparable concerns the misconduct, of the respondents cannot be used as a relevant circumstance in refusing to refer the dispute about classifi... |
It was a claim which would have benefited the employees in future and the order passed by the appellant deprives them of that benefit in future. Ratio |
Any considerations of discipline cannot, in our opinion, be legitimately allowed to impose such a punishment on the employees. Ratio |
Similarly even in regard to the claim for bonus, if the respondents are able to show that the profits earned by the company during the relevant year compared to the profits earned during the preceding years justified their demand for additional bonus it would plainly be a punitive action to refuse to refer such a dispu... |
In this connection it may be relevant to remember that for the said misconduct the company did take disciplinary action as it thought fit and necessary, and yet it paid the respondents bonus to which it thought they were entitled. Ratio |
Besides, in considering the question 247 as to whether a dispute in regard to bonus should be referred for adjudication or not it is necessary to bear in mind the well established principles of industrial adjudication which govern claims for bonus. Ratio |
A claim for bonus is based on the consideration that by their contribution to the profits of the employer the employees are entitled to claim a share in the said profits, and so any punitive action taken by the Government by refusing to refer for adjudication an industrial dispute for bonus would, in our opinion, be wh... |
If the Government had given some relevant reasons which were based on, or were the consequence of, the misconduct to which reference is made it might have been another matter. Ratio |
Under these circumstances we are unable to bold that the High Court was in error in coming to the conclusion that the impugned decision of the Government is wholly punitive in character and must in the circumstances be treated as based on a consideration which is not germane and is extraneous. Ratio |
It is clear that the Act has been passed in order to make provision for the investigation and settlement of industrial disputes, and if it appears that in cases falling under section 12(5) the investigation and settlement of any industrial dispute is prevented by the appropriate Government by refusing to make a referen... |
In the result we confirm the order passed by the High Court though not exactly for the same reasons. Ratio |
The appeals accordingly fail and are dismissed with costs, one set of hearing fees. RPC |
Appeals dismissed. RPC |
Appeals Nos. FAC |
416 of 1958 and 19 of 1959. FAC |
Appeals by special leave from the Award dated January 13, 1958, of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 218 of 1957. FAC |
M. C. Setalvad, Attorney General for India, N. A. Pal khivala, G. B. Pai and G. Gopalakrishnan, for the appellant (In C.A. No. 416 of 58) and respondent No. 1 (In C.A. No. 19 of 1959). FAC |
H. R. Gokhale, section B. Naik and K. R. Choudhury, for the respondent No. 1 (In C.A. No. 416 of 1958) and appellant (In C.A. No. 19 of 1959). FAC |
January 20. FAC |
The Judgment of the Court was delivered by GAJENDRAGADKAR, J. FAC |
These two cross appeals Go arise from an industrial dispute between the Standard Vacuum Refining Co. of India Ltd. (hereafter called 538 the appellant) and its workmen (hereafter called the respondents). FAC |
This dispute related to a claim for bonus made by the respondents against the appellant for the year commencing on January 1, 1956, and ending with December 31, 1956. FAC |
The respondents claimed that for the relevant year they were entitled to receive by way of bonus their nine months ' total earnings inclusive of all allowances and overtime and extra time earnings. FAC |
After this demand was made the conciliation officer attempted conciliation between the parties but his efforts failed, and so he submitted a failure report under section 12(4) of the (XIV of 1947). FAC |
The Government of Bombay then considered the said report and was satisfied that there was a case for reference of the said dispute to the Tribunal. FAC |
That is how the present reference came to be made under section 12(5) of the Act,. FAC |
The respondents who have made the present claim include 648 employees; amongst them 524 are operatives and 124 belong to the clerical cadre. FAC |
Before the Tribunal the respondents ' case was that during the conciliation proceedings the appellant had admitted its capacity to pay and to meet the entire claim of bonus made by them; and so it was urged that it was unnecessary to screen the respondents ' claim through the Full Bench formula. FAC |
They further alleged that the appellant was not paying a living wage to the respondents and there still remained a large gap between the wage actually received by them and the living wage to which they would be ultimately entitled. FAC |
According to the respondents their claim for bonus should be examined solely by reference to the gap which had to be filled up between the two wages; and in determining the amount of bonus all the legitimate requirements of the respondents should be carefully considered. FAC |
This claim was denied by the appellant. FAC |
It denied the respondents ' allegation that during conciliation proceedings it had admitted its capacity to pay the entire amount of bonus claimed by the respondents. FAC |
It then specifically averred that in law the respondents were not entitled to any bonus because the 539 appellant was paying them a living wage and so one of the essential conditions for the payment of bonus, namely, the need to fill the gap between the actual wage and the living wage was absent in the present case. FA... |
The appellant then set out its calculations in regard to the average wages paid to the different categories of respondents and supported its plea that they were not entitled to any bonus at all. FAC |
It may be added that the appellant had already voluntarily paid three months ' basic wages to the respondents by way of bonus, but since the respondents were making a much larger claim the appellant thought it necessary to raise this general issue of law and to contend that the respondents were not entitled to any bonu... |
On these pleadings the Tribunal had to consider the said question of law, but it appears that the material produced before it was so limited and meagre that it thought it would not be possible to arrive at any definite opinion on the question of what is the living wage in Bombay; apparently the Tribunal also thought th... |
Even so, having broadly considered the contentions raised by the appellant it held that " the wages are fair but there is still in a large number of cases a gap between the actual wage and the living wage. FAC |
" On this finding the Tribunal proceeded to examine the other contentions raised by the parties in regard to the quantum of bonus which should be awarded and it reached the conclusion that the respondents were entitled to receive five months ' basic earnings " excluding dearness and other allowances and overtime " as b... |
Accordingly it has made an award to that effect and has issued appropriate directions in that behalf. FAC |
This award is challenged by the appellant in its Civil Appeal No. 416 of 1958, and it is urged by the learned Attorney General on its behalf that the tribunal should have held that the appellant was paying a living wage to the respondents and that there was no case for 540 awarding any bonus to the respondents at all d... |
On the other hand the respondents challenge the award by their Civil Appeal No. 19 of 1959, and it is urged by Mr. Gokhale on their behalf that the tribunal was in error in not awarding the respondents a higher bonus than five months ' basic wages. FAC |
That is how the two cross appeals arise from the award under appeal. FAC |
The learned Attorney General has criticised the approach adopted by the tribunal in dealing with the question of living wage. FAC |
He contends that it was necessary that the tribunal should have carefully examined the material produced before it and should have made a definite finding one way or the other. FAC |
He commented on the fact that the finding is vague and indefinite, and he has contended that the tribunal should have made it clear as to what it exactly meant when it observed that in a large number of cases a gap between the actual wage and the living wage subsisted. FAC |
This criticism is partly justified. Ratio |
We think it would have been better if the tribunal had addressed itself to the question raised before it by the appellant and made a more definite and precise finding. Ratio |
In this connection, it must, however, be added that the oil companies have been raising this plea for some years past and the plea has been consistently rejected by tribunals during all these years. Ratio |
The present tribunal itself has had occasion to deal with this plea raised by the oil distributing companies, and since the plea had never succeeded in the past and no material change had been proved in regard to the relevant year the tribunal was probably disinclined to treat the plea very seriously and that may expla... |
Besides, the tribunal took the view, and we think rightly, that the material produced by the appellant in support of its plea is wholly insufficient and meagre. Ratio |
The point raised is one of general importance and any positive finding on the content of the concept of a living wage in the context of today would naturally affect industrial adjudication in regard to claims of 541 bonus in all industries. Ratio |
That is why, if the appellant was serious about its contention that the living wage standard had been reached in its wage structure it should have produced more satisfactory evidence which would have enabled the tribunal to attempt the task of concretely defining what the concept of living wage means in the context of ... |
Absence of sufficient and satisfactory material may also explain the approach adopted by the tribunal in dealing with this issue. Ratio |
At the hearing before us the learned Attorney General suggested that we should remand the case to enable his client to lead further and more satisfactory evidence. Ratio |
We have rejected this request. Ratio |
The appellant knew fully well the implications of the plea raised by it and the very large issue which the tribunal would have to consider in dealing with the merits of the said plea. Ratio |
If the appellant was content to support its plea on certain material and did not attempt to lead more satisfactory evidence it cannot blame the tribunal for dealing with the matter on the material such as it was. Ratio |
In such a case it would be futile for the appellant to ask for indulgence from this Court at this late stage. Ratio |
It is admitted that the appellant has paid three months ' basic wages as bonus to the respondents voluntarily for the relevant year, and we were told that an agreement has been reached between the parties in respect of bonus for subsequent years until 1963. Ratio |
They have agreed that for the two succeeding years the decision of this Court will apply and for five years thereafter a specific agreement has been reached for raising the wage structure and providing for the payment of bonus at the agreed rate. Ratio |
The learned Attorney General faintly suggested that the appellant has agreed to pay bonus voluntarily in this manner but the payment is gratuitous and should not affect the main plea raised by it in the present proceedings. Ratio |
Even so, the question raised by the appellant sounds academic and unrealistic, and that is another reason why it is not entitled to the indulgence for which the learned Attorney General has pressed before us. Ratio |
We would, therefore, deal with the point 542 seriously urged before us on behalf of the appellant on the material produced before the tribunal and such additional material as was brought to our notice. Ratio |
At the outset it is necessary to state that the plea raised by the appellant assumes that as soon as a living wage standard has been reached by any employor it would be unnecessary for him to pay any bonus to his employees. Ratio |
The learned Attorney General has naturally relied on the decisions of this Court as well as the decisions of industrial tribunals in support of his argument that the Full Bench formula which governs the decision of bonus disputes postulates that a claim for bonus can be entertained if two conditions are satisfied; the ... |
In dealing with bonus claims industrial adjudication has so far proceeded on the assumption that in the making of profits labour makes its contribution, and that since it is not receiving a living wage it is entitled to claim that the gap between the actual and the living wages should be filled by the payment of bonus ... |
We will revert to this point later. Ratio |
Meanwhile let us proceed to examine the merits of the contention that the appellant is paying the respondents a living wage. Ratio |
It is well known that the problem of wage structure with which industrial adjudication is concerned in a modern democratic State involves on the ultimate analysis to some extent ethical and social considerations. Ratio |
The advent of the doctrine of a welfare State is based on notions of progressive social philosophy which have rendered the old doctrine of laissez J faire obsolete. Ratio |
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